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Take a look at this:
Have you ever noticed that when you point the finger to blame someone for something (finger 2) there are three times as many fingers pointing back at you? (fingers 3, 4 and 5).
Now consider this tweet I just read by a U.S. Senator:
"Giant grocery store chains force high food prices onto American families while rewarding executives & investors with lavish bonuses and stock buybacks. I'm demanding they answer for putting corporate profits over consumers and workers during the pandemic."
Sen. Warren on Twitter
When I read this I applied my finger pointing model.
Instead of looking in the direction that they were pointing finger 2, I looked the other way in the direction that fingers 3, 4 and 5 were pointing.
https://twitter.com/ChrisConeyInt/status/1476572816380207109
- ChrisConeyInt
As I pointed out in this tweet quoting Sen. Warren; price is nothing but the relationship between the value of the money and the value of an item.
Due to the laws of supply and demand, if demand for bread suddenly doubled, bread has suddenly become twice as valuable, people are willing to exchange twice as many dollars for it and the 'price' is simply a reflection of that.
But notice that 'price' does not really exist as a concept on its own. Price is the relationship between two items of value that are exchanged for one another.
And so, back to my tweet in reply to Sen. Warren. It is the unprecedented printing of new dollars that has dramatically increased the supply of dollars. And it is changing that side of the equation that naturally and automatically changes the thing that measures the relationship between dollars and food... 'the price'.
So we saw that ‘giant grocery retailers’ are to blame for the price gouging.
My question is why blame the retailer? What if they had to raise their prices because their wholesalers raised their prices?
And what if the wholesalers raised their prices because the transportation companies raised their prices?
And what if the transportation companies raised their prices because the price of fuel increased?
And what if the fuel companies raised prices because their labour cost rose in line with a rise in the minimum wage laws imposed by the government?
Now to be clear, this is not a commentary or a judgement on whether the government should or should not do any of these things.
All I’m doing here is tying together the logical daisy chain of cause and effect so the real source of the problem can be identified.
If you apply a solution to something that is not the real cause of your problem, don’t be surprised if it doesn’t get solved.
Going back to the Tweet I quoted at the start, the "greedy corporations" argument actually has a very specific belief at the base of it.
It's the belief that businesses should turn themselves into a public service in a crisis.
That is, if there is a crisis and their costs of doing business rise, they should simply eat that by taking it out of their own profits.
Well firstly, there are private companies that do that, they are called insurance companies…
Second, there always seems to be one crisis or another…
And third, the problem with food retailing in particular (according to the research that I've seen) operates on a profit margin of just 2.5%.
That doesn't leave much room for absorbing any shocks to their cost of doing business. But the politicians don't seem to care about that. That is one of those inconvenient truths.
So should private companies turn themselves into a public service in a crisis? Well no, because it's the government's job to provide public services, that's what the huge tax revenues are for. So for them to say that's not enough is really to betray a lack of resourcefulness.
Misallocation of capital is one thing governments are famous for and why so many people begrudge paying taxes, they feel like they are not getting value for money when they pay taxes.
The reason everything original comes out of the private sector is because of the entrepreneurial spirit. The raw creativity that figures out how to do a lot with a little, whether that be starting a business with $1,000 and turning it into $1b, or whether it's starting to tinker with electronics in the garage and then building Apple computers.
So I've said the private sector should not become the public sector, so should the public sector become the private sector?
Well no, neither extreme is good.
But perhaps the whole debate itself is on too low a level because it all exists within the meta problem that everything seems to come back to, the lack of sound money.
A sound money system makes it far easier to draw lines of responsibility and accountability. And I suspect that is why governments don't want a sound money system, because then they would be accountable to a force higher than themselves.
Bitcoin
And that ultimately brings us to Bitcoin.
▶️ 3Speak